International Trade and Finance: Background, Challenges, and Capital Allocation

International Trade
Finance and Investment

EXECUTIVE SUMMARY
International trade or finance can be entitled as a trading activity which is performed
across borders of nation, in other words, it is trading or financing activities that is incorporated in
international market. It improvises nation's economic position as it enhances gross domestic
product as well as market share of a country.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Background of financial market:.................................................................................................4
Capital allocation within domestic economy:..............................................................................5
Capital allocation within international market: ..........................................................................7
TASK 2............................................................................................................................................8
Critically evaluating the challenges faced by the country in respect to Industrialization and
trade policies................................................................................................................................8
Conclusion ....................................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
International finance and trade investment refer to the financing activity which is included
between the financial transaction between the countries in the world for a specific period. It
means expanding of the industry and business in other country by increase the area of the income
for the generation and investment purpose for country. In this report there is the analysis of the
international trading and financing of the United Kingdom with the international market. in this
report there is the background of the financial markets and which is the main platform for the
security transaction because it increases the liquidity and efficiency of the company in increase
of the gross domestic product (Alvarado, Iniguez and Ponce., 2017). There are various financial
markets is described for that for the better utilization of the resources in the efficient manner. In
this there is the capital allocation of the domestic country in international trade and allocation of
the domestic in the international market. there are some challenges also faced by the country
which is related to industrialization and trade policies which is evaluated.
TASK 1
Background of financial market:
Financial market refers to marketplace that pertains trading of security. It is vital for
providing smooth functioning of capitalist economy by ensuring resource allocation and liquidity
creation for business. This market makes procedure easier for sellers and buyers for the purpose
of trading in relation to financial holdings. This market helps in security creation as it enables
return on excessive security, such as, investors (Anwar and Sun., 2018). Along with it, financial
market enables fund availability to people which pertains desire of excessive fund, such people
are borrowers. Various financial instruments are purchased and sold in this financial platform.
Types of financial market are forex market, derivative market, money market, over the counter
market as well as bond market. Over the counter market can be explained as market which do not
have physical location and which is decentralised. Electronic trading is conducted in this market
and participants are involved in direct trading in context to securities, in other words,
requirement of broker is not there. In context to bond security, in this type of financial security
investors loan money for specific time period and even interest rate is pre-established. Bond is an
agreement between borrowers as well as and in this detail of loan is recorded for the purpose of
payment. Trading in money market is incorporated with products of high liquidity value which
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